Portugal Crypto Tax Policy Review: What Changes Are Coming and How It Affects You
David Wallace 15 November 2025 13

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Category G: For individual investors holding crypto for more than 365 days (0% tax), less than 365 days (28% tax). Category E: Staking and lending rewards taxed at 28% when converted to fiat. Category B: Professional activities taxed at 15% of income (up to €200k threshold).

Portugal used to be the go-to place for crypto investors who wanted to avoid taxes. No capital gains tax. No reporting. Just buy, hold, and forget. That changed in 2023. The government didn’t shut the door - it just added a few rules. Now, if you’re holding crypto in Portugal, you need to know exactly how the system works, what’s coming next, and how to stay on the right side of the law.

What’s the current crypto tax rule in Portugal?

Portugal’s crypto tax system is built around three categories, each with its own rules. It’s not complicated if you know where your activity fits.

Category G - Capital Gains is what most individual investors care about. If you buy Bitcoin, hold it for more than 365 days, then sell it for euros, you pay zero tax. That’s still the biggest reason people move to Portugal for crypto. But if you sell before the year is up? You pay 28%. That’s it. No deductions. No brackets. Just a flat rate on short-term profits.

The system uses First In, First Out (FIFO) to track your holdings. So if you bought 1 BTC in January 2024 and another in June 2024, and you sell 0.5 BTC in October 2024, the system assumes you sold the January one. That matters because if it’s been less than a year, you owe tax. If it’s been over a year? You don’t.

Category E - Passive Income covers staking, lending, and interest from DeFi. When you earn rewards in crypto, you don’t pay tax right away. Tax kicks in only when you convert those rewards into euros or another fiat currency. The rate is 28% at conversion. You can choose to bundle this income with your other earnings and pay progressive rates instead - but for most people, the flat 28% is simpler and cheaper.

Category B - Professional Activities applies if you’re trading full-time, mining, or running a crypto business. If your annual gross income from crypto is under €200,000, you get a simplified rate: only 15% of your total income is counted as taxable. So if you made €100,000 from trading, only €15,000 gets added to your income. Then you pay Portugal’s personal income tax on that - which ranges from 14.5% to 53% depending on your total income. Mining is different. Because of environmental concerns, 95% of your mining revenue is taxed, not 15%.

How does Portugal compare to other EU countries?

Portugal isn’t the only country with crypto tax rules - but it’s one of the few that still lets you avoid tax on long-term holds.

In Germany, you also get tax-free gains after one year. But if you sell within 12 months, you pay your personal income tax rate - which can hit 45%. Portugal’s 28% flat rate is lower and simpler.

France taxes all crypto gains at 30%, no matter how long you hold. That includes social charges. So even if you hold Bitcoin for five years, you still pay 30%. Portugal’s 0% after 365 days is a major advantage.

United Kingdom gives you a £3,000 annual tax-free allowance, but after that, you pay 10% or 20% on gains - regardless of holding time. So if you bought ETH in 2020 and sold it in 2025, you still owe tax. Portugal doesn’t care how long you’ve held - only if it’s over a year.

Portugal’s 28% short-term rate is competitive. And the long-term exemption? It’s still unmatched in Western Europe.

What’s changing in 2025 and beyond?

There won’t be a big overhaul in 2025. But the government is quietly building the tools to catch people who aren’t reporting.

The Portuguese tax authority, Autoridade Tributária e Aduaneira, doesn’t yet have full visibility into crypto wallets. But they’re working on it. They’re connecting with exchanges, partnering with international tax agencies, and developing blockchain analysis tools. This isn’t speculation - it’s infrastructure being built right now.

Expect more audits. More requests for transaction histories. More pressure on exchanges to share data. If you’ve been holding crypto in non-KYC wallets and haven’t reported, your risk is rising fast.

The EU’s MiCAR regulation (Markets in Cryptoassets) will also play a role. It doesn’t set tax rates - that’s still up to each country. But it will standardize licensing, reporting, and AML rules. Portugal’s existing rules already line up well with MiCAR, so major changes aren’t needed. But expect more clarity on what counts as “professional trading” versus casual investing.

One possible tweak? The €200,000 threshold for simplified Category B taxation. If the government finds too many people gaming the system, that number could drop. Watch for that in next year’s budget.

Trader stressed by short-term crypto taxes vs. calm investor with tax-free long-term holding.

Who needs to worry the most?

Not everyone. Most people in Portugal can relax.

If you’re a long-term holder - bought crypto more than a year ago and plan to hold it - you’re golden. No tax. No reporting. Just keep your purchase records.

If you’re a staking participant - earning rewards in crypto - you’re fine too. Just don’t convert those rewards without tracking the date. That’s when the tax hits.

But if you’re an active trader - buying and selling multiple times a week - you’re in the spotlight. You must track every transaction. You must use FIFO. You must report every short-term gain. One mistake, and you owe 28% on top of penalties.

And if you’re a miner or professional trader - running a business - you’re under the most scrutiny. The 15% taxable income rule sounds generous, but the IRS-equivalent in Portugal is watching. Keep detailed books. Use accounting software. Don’t mix personal and business wallets.

How to stay compliant

Compliance isn’t optional anymore. Here’s what you need to do:

  1. Track every transaction - buys, sells, trades, staking rewards. Use tools like CoinTracking, Koinly, or CryptoTaxCalculator. They auto-import from exchanges and apply FIFO correctly.
  2. Know your holding periods. Mark the date you bought each coin. Don’t guess. If you’re unsure, assume it’s under a year and prepare to pay 28%.
  3. Separate professional and personal activity. If you trade more than 10 times a month, or earn over €10,000/year from crypto, treat it as a business. Open a separate bank account. Keep receipts.
  4. Report staking rewards only at conversion. No need to report when you get ETH from staking. Only when you sell it for euros.
  5. Keep records for 10 years. Portugal can audit you for up to a decade. Save your wallet addresses, transaction IDs, and exchange statements.

Many people think Portugal is still a tax-free zone. That’s a dangerous myth. The rules changed. The tools are coming. The window for ignoring taxes is closing.

Tax Authority superhero scanning crypto wallets with blockchain cape in stormy Lisbon.

What happens if you don’t report?

Penalties aren’t just fines. They’re criminal.

If you’re caught hiding crypto income, you’ll pay back taxes plus interest - and a penalty of up to 50% of the unpaid amount. In serious cases, you could face fraud charges. Portugal doesn’t have extradition treaties for tax evasion with every country, but they’re tightening cooperation with the EU and OECD.

And if you’re a digital nomad? Your home country might still tax you. Portugal doesn’t tax long-term crypto gains - but your home country might. Make sure you understand both systems.

There’s no amnesty program. No grace period. If you haven’t reported, the best move is to start now. File past years voluntarily. You’ll pay less than if you get caught.

Is Portugal still a good place for crypto investors?

Yes - but only if you play by the new rules.

The 365-day exemption is still the best in Europe. The 28% short-term rate is fair. The lack of minimum capital requirements for crypto businesses is a plus. The country still welcomes digital nomads. The lifestyle is unbeatable.

But the days of “crypto tax-free” are over. Portugal didn’t become a tax haven by accident. It became one because it had no rules. Now it has rules - and it’s using them.

If you’re smart, you’ll use the rules to your advantage. Hold long. Don’t trade like a day trader. Keep clean records. Don’t mix business and personal activity. And don’t assume the government doesn’t know what you’re doing.

Portugal’s system is designed to reward patience. Not speed. Not secrecy. Just smart, legal, long-term investing.

Is crypto still tax-free in Portugal in 2025?

No, crypto is not fully tax-free in Portugal anymore. Long-term capital gains (assets held over 365 days) are still tax-free when converted to euros. But short-term gains (under 365 days) are taxed at 28%. Staking rewards are taxed at 28% when converted to fiat. Professional crypto trading is taxed under income tax rules.

Do I have to report crypto if I didn’t sell it?

You only need to report crypto if you sold, traded, or converted it to fiat. Holding crypto without selling doesn’t trigger a tax event. However, if you earned staking or lending rewards, you must report them when you convert them to euros - not when you receive them in crypto.

What if I trade crypto for another crypto in Portugal?

Crypto-to-crypto trades are treated as taxable events in Portugal. Each trade counts as a sale of the first asset and a purchase of the second. You must calculate the capital gain or loss on the asset you sold using FIFO. If you held it less than 365 days, you owe 28% on the profit. If you held it longer, no tax is due.

How does Portugal know if I own crypto?

Portugal’s tax authority is building tools to track crypto. They’re working with exchanges, banks, and international agencies. Many exchanges operating in Portugal now report user data under AML/KYC rules. Even if you use a non-KYC wallet, the government can cross-reference bank transfers, property purchases, or lifestyle changes. The risk of getting caught is rising fast.

Can I avoid Portuguese crypto tax by living elsewhere?

Yes - but only if you’re not a tax resident of Portugal. If you live in Portugal for more than 183 days a year, you’re a tax resident and must report global income, including crypto. If you’re a non-resident, Portugal doesn’t tax your crypto gains. But your home country might. Always check your tax residency status before assuming you’re exempt.

Do I need to register as a business if I trade crypto regularly?

Not automatically. But if you’re trading full-time, earning over €10,000/year, or treating it like a job, the tax authority may classify you under Category B (professional activity). That means you must use the 15% simplified regime and keep business records. You don’t need a license, but you do need to report accurately and pay income tax on the taxable portion of your earnings.